Northern Territory Explanatory Statements

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MINING AMENDMENT BILL 2009

2009

LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

TREASURER

MINING AMENDMENT BILL 2009
SERIAL NO. 60

EXPLANATORY STATEMENT

GENERAL OUTLINE

This Bill makes consequential amendments to the Mining Act. These amendments are a result of the Commonwealth’s Uranium Royalty (Northern Territory) Act 2009, which introduces a legislative royalty regime in the Northern Territory to any new mining project containing prescribed substances.

Prescribed substances include uranium, thorium, some similar elements and compounds or derivatives of these. Prescribed substances are defined in the Atomic Energy Act 1953 (Cth) and are owned by the Commonwealth.

The Commonwealth’s legislation addresses an uncertainty to the development of the uranium mining industry in the Northern Territory, as any royalty arrangement currently will be determined on a project-by-project basis. This uncertainty could affect investment decisions.

The Commonwealth’s legislation adopts the Territory’s existing royalty regime in the Mineral Royalty Act. In effect, this will apply an 18 per cent profits-based royalty regime to new uranium mines in the Territory.

Under the Commonwealth’s uranium royalty scheme, royalties for new uranium mines are to be collected by the Northern Territory on behalf of the Commonwealth. In turn, amounts equivalent to the royalties collected by Treasury are to be paid by the Commonwealth to the Territory.

The consequential amendments to the Mining Act proposed by the Bill are necessary to facilitate the new Commonwealth scheme.


NOTES ON CLAUSES

Clause 1. Short title

This is a formal clause which provides for the citation of the Bill. When passed, the Bill may be referred to as the Mining Amendment Act 2009.

Clause 2. Commencement

The Mining Amendment Act 2009 will commence on a date fixed by the Administrator by Gazette notice.

Clause 3. Act amended

The Act being amended by this Bill is the Mining Act.

Clause 4. Repeal and substitution of section 175

This clause replaces section 175 of the Mining Act with a new section 175, which largely replicates the existing section and expands on the existing provisions to facilitate the Commonwealth’s legislative royalty regime.

New section 175(1) clarifies that section 175 applies irrespective of any other provision of the Mining Act or the Mining Regulations. This is consistent with former section 175(1) of the Mining Act.

New section 175(2) provides for the manner in which the Territory Minister responsible for the Mining Act, currently the Minister for Primary Industry, Fisheries and Resources, is to exercise powers with respect to prescribed substances.

In particular, the power of the Territory Minister must be exercised in accordance with the advice of the Commonwealth Minister responsible for authorising the mining of prescribed substances in the Territory. This is also consistent with former section 175(1) of the Mining Act.

New section 175(3) clarifies the operation of new section 175(2). It provides that new section 175(2) does not prevent the Territory Minister from acting without the advice of the Commonwealth Minister in relation to exploration licences. The Territory Minister is also not required to take or give effect to any advice of the Commonwealth Minister in relation to exploration licences. This is consistent with former section 175(2) of the Mining Act.

New section 175(3) also provides for a similar approach regarding advice of the Commonwealth Minister, for the exercise of powers under an administrative arrangement under section 7 of the Uranium Royalty (Northern Territory) Act 2009 (Cth). This is unless the administrative arrangement requires compliance with new section 175(2).

The administrative arrangement under section 7 of the Uranium Royalty (Northern Territory) Act 2009 (Cth) must be in place to enable the Commonwealth’s Act to operate. These arrangements are currently being negotiated between the Commonwealth Minister for Resources and Energy and the Northern Territory Treasurer.

New sections 175(4) and (5) outline the framework for the collection of mining royalties for mineral leases in respect of prescribed substances. As the Uranium Royalty (Northern Territory) Act 2009 (Cth) does not apply to the Ranger Project Area, it is necessary to distinguish this Area from a new mineral lease that may be granted in respect of a prescribed substance.

This recognises that Ranger is the only operating uranium mine in the Territory and the Commonwealth will maintain the pre-existing royalty arrangements for the Ranger Project Area.

New section 175(4) provides that a person specified in an authority under section 41 of the Atomic Energy Act 1953 (Cth) in respect of a prescribed substance in the Ranger Project Area is liable to pay royalties to the Commonwealth. Royalties are to be paid to the Commonwealth in accordance with the terms of an agreement between the person specified in the authority, currently Energy Resources of Australia Limited, and the Commonwealth.

This is consistent with former section 175(3) of the Mining Act. Accordingly, this amendment does not change the royalty treatment of the Ranger Uranium Mine.

New section 175(5) provides that the lessee of a mineral lease granted in respect of a prescribed substance must pay royalties to the Commonwealth in accordance with the provisions of a Northern Territory law that apply as laws of the Commonwealth. New section 175(5) does not apply to an authority under section 41 of the Atomic Energy Act 1953 (Cth) for the Ranger Project Area.

The main Territory law to be applied as a law of the Commonwealth, pursuant to the Uranium Royalty (Northern Territory) Act 2009 (Cth), is the Mineral Royalty Act.

New section 175(6) is a technical amendment to provide that the Territory has the appropriation to refund to the Commonwealth any overpaid amounts received by the Territory as equivalent royalties under the Uranium Royalty (Northern Territory) Act 2009 (Cth). This facilitates the Territory administering royalty collection on behalf of the Commonwealth and is consistent with the existing arrangements in respect of the collection of royalties from Ranger.

New section 175(7) defines the terms “applied law”, “Atomic Energy Act”, “Commonwealth Minister”, “exercise”, “prescribed substance”, “Ranger Project Area”, “received amount”, and “Uranium Royalty Act”. These terms are relevant to the operation of new section 175 and are consistent with the Uranium Royalty (Northern Territory) Act 2009 (Cth).

Clause 5. Further amendments

This clause introduces a Schedule to make consequential amendments to sections 166(1)(g) and 192(2)(n) of the Mining Act, to change former references to repealed section 175(3) with new replacement sections 175(4) and (5).

 

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